Local Content Requirements

What are Local Content Requirements?

Local Content Requirements are procurement policies used by Australian government agencies to promote the use of local businesses, workers, and materials in government-funded projects. These requirements vary across jurisdictions but share the common goal of ensuring public spending supports Australian industry and employment.

How Do Local Content Requirements Work?

Local content can be incorporated into procurement in several ways:

• Evaluation Criteria — local content may be a scored criterion, with higher local content receiving better scores
• Mandatory thresholds — some procurements set minimum local content percentages
• Reporting obligations — successful tenderers may need to report on actual local content achieved during delivery
• Price preferences — some jurisdictions apply a price preference for local suppliers (e.g., a percentage discount applied to local bids for evaluation purposes)

State and Territory Approaches

Local content policies vary significantly across Australia:

• Victoria — the Local Jobs First Act requires local content commitments for projects above certain thresholds, assessed through the ICN Gateway
• Queensland — the Queensland Procurement Policy includes a ‘best practice’ local content framework
• South Australia — the Industry Advocate oversees local content requirements and the Industry Participation Policy
• Western Australia — the WA Industry Participation Strategy applies to state government contracts
• Commonwealth — the Commonwealth Procurement Rules require agencies to consider the economic benefit of procurement to the Australian economy

What Counts as Local Content?

Local content typically includes:

• Labour — Australian workers and subcontractors
• Materials — goods manufactured or sourced in Australia
• Services — professional and support services provided by Australian firms
• Regional content — some policies further prioritise content from specific regions, particularly for regional projects

Tips for Tenderers

• Maximise local content — even where it is not mandatory, it is almost always valued.
• Document your supply chain — be prepared to demonstrate where your materials, services, and labour are sourced.
• Use the ICN Gateway — this platform helps identify local suppliers and is required for some Victorian and South Australian procurements.
• Be honest — overstating local content can lead to contract penalties and reputational damage.